Brazil's Suzano readies $15 billion bid for International Paper, sources say
Adds comment from Suzano in paragraph 4
By Anirban Sen
NEW YORK, May 7 (Reuters) -Brazilian pulp and paper company Suzano SUZB3.SA has approached U.S.-based International Paper IP.N to express interest in an all-cash acquisition that would be worth almost $15 billion, according to people familiar with the matter.
The approach comes less than a month after International Paper agreed to buy British packaging firm DS Smith SMDS.L for $7.2 billion, beating out a rival bid from London-listed Mondi MNDI.L. This deal, which is scheduled to close by the fourth quarter of 2024, could be disrupted were Suzano to press ahead with its bid for Memphis-based International Paper.
Suzano has communicated its $42-per-share offer to International Paper's board of directors verbally, and could submit a formal bid in the coming days, according to the sources, who spoke on condition of anonymity. International Paper is poised to reject Suzano's offer as inadequate, one of the sources said.
Suzano said in a securities filing on Tuesday evening that it has neither signed any agreement with International Paper for a potential business combination nor has any decision been made by the company's management in respect to a potential deal.
International Paper's shares jumped as much as 12% on the news before paring some gains earlier on Tuesday, giving the company a market capitalization of about $13.5 billion. Its shares closed up more than 5%.
Shares of Suzano, which has a market value of 77.6 billion reais ($15.33 billion), closed down more than 12% in Brazil. DS Smith's shares in London fell as much as 7.3% before reversing most of those losses to close down about 1%.
Suzano, the world's largest pulp manufacturer, is in talks to line up debt financing to support its bid, and has informed International Paper that the offer would be conditional on the latter abandoning its deal with DS Smith, the sources said.
International Paper declined to comment on Suzano's approach, saying the company continues to focus on completing its deal for DS Smith.
"The IP team, led by new CEO Andy Silvernail, is executing on business strategies and pursuing commercial and cost improvement initiatives across the portfolio to achieve best-in-class profit margins and significant earnings growth. In addition, as industry conditions continue to improve, IP will come out of a cyclical bottom for earnings," International Paper said in a statement.
The packaging industry had benefited from a surge in demand during the COVID-19 pandemic as consumers placed more orders through e-commerce sites during worldwide lockdowns. But as e-commerce growth returned to more normal levels after lockdowns were lifted, the sector turned to dealmaking to maintain growth.
Last year, Ireland-based Smurfit Kappa SKG.I agreed to combine with U.S.-based WestRock WRK.N in a deal worth $20 billion.
International Paper said last month its tie-up with DS Smith would extend its reach in Europe and deliver annual pre-tax cash synergies of at least $514 million. Combining with International Paper would allow Suzano to expand in packaging.
Suzano is in the middle of a CEO transition. It has tapped Joao Alberto Fernandez de Abreu, the former head of rail operator Rumo RAIL3.SA, as its new CEO to replace Walter Schalka, who led the company for 11 years.
In February, Suzano reported a 39% fall in its fourth-quarter net profit from a year earlier as lower pulp prices hurt revenue.
($1 = 5.0758 reais)
Reporting by Anirban Sen in New York, additional reporting by Alberto Alerigi Jr., Peter Siqueira and Steven Grattan in Sao Paulo; Editing by Will Dunham and Lincoln Feast.
Activos relacionados
Últimas noticias
Descargo de responsabilidades: Cada una de las entidades de XM Group proporciona un servicio de solo ejecución y acceso a nuestra plataforma de trading online, permitiendo a una persona ver o usar el contenido disponible en o a través del sitio web, sin intención de cambiarlo ni ampliarlo. Dicho acceso y uso están sujetos en todo momento a: (i) Términos y Condiciones; (ii) Advertencias de riesgo; y (iii) Descargo completo de responsabilidades. Por lo tanto, dicho contenido se proporciona exclusivamente como información general. En particular, por favor tenga en cuenta que, los contenidos de nuestra plataforma de trading online no son ni solicitud ni una oferta para entrar a realizar transacciones en los mercados financieros. Operar en cualquier mercado financiero implica un nivel de riesgo significativo para su capital.
Todo el material publicado en nuestra plataforma de trading online tiene únicamente fines educativos/informativos y no contiene –y no debe considerarse que contenga– asesoramiento ni recomendaciones financieras, tributarias o de inversión, ni un registro de nuestros precios de trading, ni una oferta ni solicitud de transacción con instrumentos financieros ni promociones financieras no solicitadas.
Cualquier contenido de terceros, así como el contenido preparado por XM, como por ejemplo opiniones, noticias, investigaciones, análisis, precios, otras informaciones o enlaces a sitios de terceros que figuran en este sitio web se proporcionan “tal cual”, como comentarios generales del mercado y no constituyen un asesoramiento en materia de inversión. En la medida en que cualquier contenido se interprete como investigación de inversión, usted debe tener en cuenta y aceptar que dicho contenido no fue concebido ni elaborado de acuerdo con los requisitos legales diseñados para promover la independencia en materia de investigación de inversiones y, por tanto, se considera como una comunicación comercial en virtud de las leyes y regulaciones pertinentes. Por favor, asegúrese de haber leído y comprendido nuestro Aviso sobre investigación de inversión no independiente y advertencia de riesgo en relación con la información anterior, al que se puede acceder aquí.